I deleted an email account on cPanel and by chance on my outlook I sent a test email using the deleted email account and to my surprise it actually sent the email and I received it on my other email address.

I just found out why this is happening. Although the email account was deleted on cPanel, the same email address was being forwarded to another email address created on cPanel's forwarding feature. I deleted the forwarding and I could no longer send emails from that account using Outlook. However I added the forwarding again and I could again send emails out.

I also created a fake email using the same domain on my outlook and to my surprise it sent out the email. Does this mean my SMTP is un-secure? Is there a way to prevent anyname@mydomain.com to send out emails using the smtp?

What I mean is someone could easily create a fake email and use my SMTP settings to send out spam emails.

Would appreciate if one of the gurus could lead me in the right direction.

How would someone send out an email using your SMTP settings without a username and password for logging into your machine? Yes, someone can spoof the email address, but they must have a valid email account on the machine in the first place in order to send emails from your machine.